President Barack Obama says the US will end its outdated approach to Cuba that has failed to advance US interests.

Mr Obama is announcing that the US and Cuba have agreed to re-establish diplomatic relations and open economic and travel ties.

The president said that the US is changing its relationship with Cuba. He says it's the most significant change in US policy toward Cuba in more than 50 years.

He added that the US will now begin to "normalise" its relations with Cuba and begin a new chapter.

He says the US intends to create more opportunities for Americans and Cubans to work together.

Meanwhile, Cuban President Raul Castro said he welcomes the restoration of relations with the United States.

In a nationally broadcast speech, the Cuban leader says profound differences remain between Cuba and the US in areas such as human rights, foreign policy and questions of sovereignty.

But he says the countries have to learn to live with their differences "in a civilized manner".